Edenden v Bignell [2007] NSWSC 1122

Edenden v Bignell [2007] NSWSC 1122

The plaintiffs, as individual creditors, lack standing to seek the forms of relief under the Corporations Act relating to voidable transactions (ss 588FB, 588FC, 588FDA, 588FE, 588FF), as only the company's liquidator may apply. Declaratory relief as sought would serve no legal utility between the parties. Only the claim for compensation due to insolvent trading under s.588M may in principle be maintainable by a creditor, and only if brought according to the statutory procedural requirements relating to liquidator notice and leave. The version pleaded by the plaintiffs does not comply, and therefore only that claim is struck out, with liberty to re-plead. The other claims are untenable...

Parties
First Plaintiff: Stephen Gary Edenden; Second Plaintiff: Paula Anne Edenden; First Defendant: Mark Alexander Bignell; Second Defendant: Kathryn Margaret Bignell; Third Defendant: A J Bignell Pty Ltd
Jurisdiction
Australia
Judgment Date
10 October 2007
Procedural Posture
Civil (corporations/equity) / Ruling on Interlocutory Application for Summary Dismissal or Strike Out of Claims
Outcome
Certain claims dismissed; remaining claim struck out (with liberty to re-plead)
Legal Topics
Winding Up, Insolvent Trading, Voidable Transactions, Summary Dismissal, Declaratory Relief
Corporations Law Equity Winding Up Insolvent Trading Voidable Transactions Summary Dismissal Declaratory Relief

Case Brief

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Parties

Stephen Gary Edenden

First Plaintiff

Paula Anne Edenden

Second Plaintiff

Mark Alexander Bignell

First Defendant

Kathryn Margaret Bignell

Second Defendant

A J Bignell Pty Ltd

Third Defendant

Procedural Posture

Civil (corporations/equity) / Ruling on Interlocutory Application for Summary Dismissal or Strike Out of Claims

Legal Issues

  1. 1 Whether creditors have standing to seek relief under voidable transaction provisions (s.588FF)
  2. 2 Whether individual creditors can bring insolvent trading claims in their own right and if so, under what statutory conditions
  3. 3 Appropriateness of granting declaratory relief for alleged insolvent trading or voidable transactions

Ratio Decidendi

The plaintiffs, as individual creditors, lack standing to seek the forms of relief under the Corporations Act relating to voidable transactions (ss 588FB, 588FC, 588FDA, 588FE, 588FF), as only the company's liquidator may apply. Declaratory relief as sought would serve no legal utility between the parties. Only the claim for compensation due to insolvent trading under s.588M may in principle be maintainable by a creditor, and only if brought according to the statutory procedural requirements relating to liquidator notice and leave. The version pleaded by the plaintiffs does not comply, and therefore only that claim is struck out, with liberty to re-plead. The other claims are untenable...

Court Disposition

Certain claims dismissed; remaining claim struck out (with liberty to re-plead)

Orders

  • Order that the proceedings be dismissed as to the claims in Items 1, 2, 4, 5, 6, and 7 (various declaratory and repayment relief under voidable transaction and insolvent trading provisions) in the originating process.
  • Order that the claim in Item 3, relating to leave under s.588T to proceed with s.588M application, be struck out.